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Why Is Yum! Brands (YUM) Up 7% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Yum! Brands, Inc. (YUM - Free Report) . Shares have added about 7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock next earnings release, or is the stock due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Yum! Brands Beats on Q1 Earnings, Revenues Down Y/Y
Yum! Brands posted better-than-expected first-quarter 2017 results with both earnings and revenues surpassing the Zacks Consensus Estimate.
Earnings and Revenue Discussion
Adjusted earnings of $0.65 per share surpassed the Zacks Consensus Estimate of $0.60 by 8.3%. Further, earnings increased 17% year over year due to lower share count.
Total revenues of $1.42 billion were down 1.8% year over year primarily owing to lower company sales. However, revenues came above the Zacks Consensus Estimate of nearly $1.35 billion by over 5%.
Comps Discussion
From Jan 2016, the company’s India business integrated its three restaurant brands into the global KFC, Pizza Hut and Taco Bell divisions. In fact, Yum! Brands’ had completed the spin-off of the China business into an independent, publicly-traded company on Oct 31, 2016. Post-separation, Yum! Brands now reports under three segments – KFC, Pizza Hut and Taco Bell.
Comps at the KFC division were up 2% lower than the year-ago quarter and last quarter’s growth of 3%. Growth was witnessed across the U.S. as well as developed and emerging markets internationally.
Pizza Hut comps decreased 3% comparing unfavorably with comps decline of 1% in the year-ago quarter as well as last quarter’s dip of 2%. Comps grew 2% and 1% in international emerging and international developed markets respectively, but plunged 7% in the U.S.
Taco Bell comps increased 8%, better than comps growth of 1% a year ago and 3% in the preceding quarter. The upside was driven on the back of industry-leading value and innovation in the quarter.
While restaurant margins improved at KFC and Taco Bell, it declined significantly at the Pizza Hut division.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, Yum! Brands' stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a 'F'. Charting a somewhat similar path, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is solely suitable for growth investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Yum! Brands (YUM) Up 7% Since the Last Earnings Report?
It has been about a month since the last earnings report for Yum! Brands, Inc. (YUM - Free Report) . Shares have added about 7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock next earnings release, or is the stock due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Yum! Brands Beats on Q1 Earnings, Revenues Down Y/Y
Yum! Brands posted better-than-expected first-quarter 2017 results with both earnings and revenues surpassing the Zacks Consensus Estimate.
Earnings and Revenue Discussion
Adjusted earnings of $0.65 per share surpassed the Zacks Consensus Estimate of $0.60 by 8.3%. Further, earnings increased 17% year over year due to lower share count.
Total revenues of $1.42 billion were down 1.8% year over year primarily owing to lower company sales. However, revenues came above the Zacks Consensus Estimate of nearly $1.35 billion by over 5%.
Comps Discussion
From Jan 2016, the company’s India business integrated its three restaurant brands into the global KFC, Pizza Hut and Taco Bell divisions. In fact, Yum! Brands’ had completed the spin-off of the China business into an independent, publicly-traded company on Oct 31, 2016. Post-separation, Yum! Brands now reports under three segments – KFC, Pizza Hut and Taco Bell.
Comps at the KFC division were up 2% lower than the year-ago quarter and last quarter’s growth of 3%. Growth was witnessed across the U.S. as well as developed and emerging markets internationally.
Pizza Hut comps decreased 3% comparing unfavorably with comps decline of 1% in the year-ago quarter as well as last quarter’s dip of 2%. Comps grew 2% and 1% in international emerging and international developed markets respectively, but plunged 7% in the U.S.
Taco Bell comps increased 8%, better than comps growth of 1% a year ago and 3% in the preceding quarter. The upside was driven on the back of industry-leading value and innovation in the quarter.
While restaurant margins improved at KFC and Taco Bell, it declined significantly at the Pizza Hut division.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Yum! Brands, Inc. Price and Consensus
Yum! Brands, Inc. Price and Consensus | Yum! Brands, Inc. Quote
VGM Scores
At this time, Yum! Brands' stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a 'F'. Charting a somewhat similar path, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is solely suitable for growth investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.